Q: I wasn't able to replace my furnace last year, but need to now. Are there still any tax credits available to help with the replacement cost in 2011?
A: While the Federal Residential Renewable Energy Program, which provided up to
$1,500 toward the purchase price of qualified Energy Star heating and/or cooling
systems, ended on December 31st, it does not mean that there is no longer any
financial assistance available to Indiana homeowners. In fact, in some
cases the tax credit has gotten even better, depending on the type of
system purchased.
Federal tax credits on qualifying, high-efficiency HVAC & Water Heating
equipment have been modified and extended through December 31, 2011
by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation
Act of 2010.
The 2009-2010 energy efficiency program provided a 30% credit, up to $1,500,
for any new Energy Star-rated system, both conventional and the newer geothermal
systems.
Changes to the Federal Energy Efficiency Tax Credit programs for 2011
include:
- 10% of cost up to $500 for conventional ventilation systems
(or a specific amount from $50 – $300,) including:
- Advanced Main Air Circulating Fan
- Air Source Heat Pumps
- Central Air Conditioning
- Gas, Propane, or Oil Hot Water Boiler
- Natural Gas, Propane or Oil Furnace
This program ends December 31, 2011. To qualify, the new equipment
must be installed in an existing home & your principal residence.
New construction and rentals do not qualify.
- 30% of cost with no upper limit for Geothermal Heat Pumps,
including water-to-water GHPs, which provide space conditioning and/or
domestic water heating using indoor refrigerant-to-water heat
exchangers. This can save you even more than $1,500.
- Existing homes & new construction qualify
- Both principal residences and second homes qualify
- Rental properties do not qualify
This tax credit is in effect through 2016.
The new program differs from the program effective in 2009-2010 in
the following ways:
- The maximum credit will be reduced from $1,500 to $500
(with a maximum per-category amount as listed in the table below.)
- The $500 cap is reduced by the total amount of residential
energy property credits a homeowner has claimed for purchases between 2006
and 2010.
If you have already claimed credits of $500 or more from
improvements made prior to 2011, you will be unable to claim new credits for
improvements made during 2011.
- All furnaces and boilers, whether natural gas, propane or oil,
must have an Annual Fuel Utilization Efficiency (AFUE) of 95 or above
to be eligible for the credit.
- The credit is reduced from 30% of qualified residential energy property
costs (including labor) to 10% of installed costs, not to exceed the
set amounts listed below:
|
Maximum Available Credit |
Product Type |
Efficiency Requirements |
| $50 |
Any advanced main air circulating fan |
Electricity use of no more than 2% of the total energy use of the
furnace |
| $150 |
Natural Gas, Propane, Oil Furnace or Boiler |
95% AFUE |
| $300 |
Split System Air Conditioners |
16 SEER
(Seasonal Energy Efficiency Ratio)
/ 13 EER
(Energy Efficiency Ratio) |
| $300 |
Split-System Heat Pumps |
15 SEER / 12.5 EER / 8.5 HSPF |
| $300 |
Package Air Conditioners |
14 SEER / 12 EER |
| $300 |
Package Heat Pump |
14 SEER / 12 EER / 8 HSPF |
| $300 |
Package Gas / Electric |
14 SEER / 12 EER |
| $300 |
Gas Water Heater |
EF >= 0.82 or TE >= 0.90 |
| $300 |
Heat Pump Water Heater |
EF >= 2.0 |
For more information about the new Federal Energy Efficiency Tax Credits for
2011, visit the
Energy Star web site.
Before you make costly repairs to your existing system, you
should seriously consider upgrading to a new HVAC system.
Between currently available Federal Tax Credits, Energy Star "Energy
Efficiency" Rebates, and the continued reduction of your utility
costs, you could save hundreds, or even thousands, of dollars over
the lifetime of the new equipment.
To schedule a
free in-home estimate,
contact Thiele Heating & Air Conditioning. Call us today, (317) 639-1111.
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